The world's debt stock surged to a record $318 trillion in 2024, pushing the global debt-to-GDP ratio to 328%. This marks the first increase since 2020 as economic growth slowed and borrowing remained elevated. The latest report by the Institute of International Finance reveals that while the $7 trillion rise in debt was lower than the 2023 levels, concerns over fiscal deficits are growing.

Global debt rises to $318 trillion in 2024, says IIF

The world has witnessed a staggering surge in global debt, reaching an unprecedented high of $313 trillion in 2023, as reported by the Institute of International Finance (IIF), a financial services trade group. <o:p></o:p>

The IIF's Global Debt Monitor revealed that this record-breaking figure represents an increase of over $15 trillion in the last quarter of 2023 year-on-year, emphasising the monumental growth from around $210 trillion almost a decade ago.<o:p></o:p>

According to the IIF, about 55 per cent of this surge in global debt originated from mature markets, with the United States, France, and Germany being the primary contributors.<o:p></o:p>

Despite a decline of approximately 2 percentage points in the global debt-to-GDP ratio, settling at nearly 330 per cent in 2023, certain emerging markets experienced a surge in the ratio, indicating potential challenges in debt repayments. <o:p></o:p>

Notably, India, Argentina, China, Russia, Malaysia, and South Africa registered the largest increases, raising concerns about their ability to meet debt obligations.<o:p></o:p>

"While the reduction in this ratio was particularly notable in developed countries," stated the IIF, "some emerging markets saw a fresh high in the reading that indicates a country's ability to pay back debts." <o:p></o:p>

The report highlighted uncertainties surrounding US policy rates and the US dollar, potentially increasing market volatility and tightening funding conditions for countries relying heavily on external borrowing.<o:p></o:p>

Despite the concerns, the IIF noted that the global economy has demonstrated resilience to borrowing cost volatility, resulting in a rebound in investor sentiment. <o:p></o:p>

The appetite for borrowing, especially in emerging markets, is on the rise in 2024, evidenced by increased international sovereign bond issuance volumes. <o:p></o:p>

Notably, countries like Saudi Arabia, Mexico, Hungary, and Romania have engaged in significant bond issuances, reaching an all-time record for January at $47 billion.<o:p></o:p>

"If sustained, this upbeat sentiment should also reverse the ongoing deleveraging by European governments and non-financial corporates in mature markets, both of which are now less indebted than in the run-up to the pandemic," suggested the IIF, highlighting the potential positive impact of the current trend on European economies.<o:p></o:p>

However, the IIF expressed concerns about potential inflationary pressures, which could result in higher borrowing costs. <o:p></o:p>

Geopolitical risks were also identified as a "structural market risk," with growing fragmentation raising concerns about fiscal discipline worldwide. <o:p></o:p>

The IIF emphasised that government budget deficits remain above pre-pandemic levels, and any acceleration in regional conflicts could trigger a significant increase in defence spending, adding an additional layer of complexity to the global economic landscape.<o:p></o:p>

(With inputs from Reuters)<o:p></o:p>

The world has witnessed a staggering surge in global debt, reaching an unprecedented high of $313 trillion in 2023, as reported by the Institute of International Finance (IIF), a financial services trade group.

The world has witnessed a staggering surge in global debt, reaching an unprecedented high of $313 trillion in 2023, as reported by the Institute of International Finance (IIF), a financial services trade group. The IIF's Global Debt Monitor revealed that this record-breaking figure represents an increase of over $15 trillion in the last quarter of 2023 year-on-year, emphasising the monumental growth from around $210 trillion almost a decade ago. According to the IIF, about 55 per cent of this surge in global debt originated from mature markets, with the United States, France, and Germany being the primary contributors. Despite a decline of approximately 2 percentage points in the global debt-to-GDP ratio, settling at nearly 330 per cent in 2023, certain emerging markets experienced a surge in the ratio, indicating potential challenges in debt repayments. Notably, India, Argentina, China, Russia, Malaysia, and South Africa registered the largest increases, raising concerns about their ability to meet debt obligations. "While the reduction in this ratio was particularly notable in developed countries," stated the IIF, "some emerging markets saw a fresh high in the reading that indicates a country's ability to pay back debts." The report highlighted uncertainties surrounding US policy rates and the US dollar, potentially increasing market volatility and tightening funding conditions for countries relying heavily on external borrowing. Despite the concerns, the IIF noted that the global economy has demonstrated resilience to borrowing cost volatility, resulting in a rebound in investor sentiment. The appetite for borrowing, especially in emerging markets, is on the rise in 2024, evidenced by increased international sovereign bond issuance volumes. Notably, countries like Saudi Arabia, Mexico, Hungary, and Romania have engaged in significant bond issuances, reaching an all-time record for January at $47 billion. "If sustained, this upbeat sentiment should also reverse the ongoing deleveraging by European governments and non-financial corporates in mature markets, both of which are now less indebted than in the run-up to the pandemic," suggested the IIF, highlighting the potential positive impact of the current trend on European economies. However, the IIF expressed concerns about potential inflationary pressures, which could result in higher borrowing costs. Geopolitical risks were also identified as a "structural market risk," with growing fragmentation raising concerns about fiscal discipline worldwide. The IIF emphasised that government budget deficits remain above pre-pandemic levels, and any acceleration in regional conflicts could trigger a significant increase in defence spending, adding an additional layer of complexity to the global economic landscape. (With inputs from Reuters)

Global debt skyrockets to unprecedented $313 tn, emerging markets facing new challenges

A key gauge of <a href="https://www.wionews.com/world/chinese-people-have-freedom-of-religion-us-should-stop-using-issue-of-religion-to-interfere-china-236881">China</a>'s debt has topped 300 per cent&nbsp;of gross domestic product, according to the Institute of International Finance (IIF), as Beijing steps up support for the cooling economy while trying to contain financial risks.

China's total corporate, household and government debt rose to 303 per cent&nbsp;of GDP in the first quarter of 2019, from 297 per cent&nbsp;in the same period a year earlier, the IIF said in a report this week which highlighted rising debt levels worldwide.

The IIF is a private global financial industry association, based in Washington.

"While authorities' efforts to curb shadow bank lending (particularly to smaller companies) have prompted a cutback in non-financial corporate debt, net borrowing in other sectors has brought China's total debt to over $40 trillion - some 15 per cent&nbsp;of all global debt," the report said.

"Of note, onshore bond issuance suggests a big pickup in borrowing by local governments and banks this year."

China's economic growth slowed to 6.2 per cent&nbsp;in the second quarter, its weakest pace in at least 27 years, as demand at home and abroad faltered in the face of mounting <a href="https://www.wionews.com/world/pompeo-calls-chinas-treatment-of-uighurs-stain-of-the-century-237014">US&nbsp;trade pressure</a>.

Watch:&nbsp;China's economic growth slowest in 27 years

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="https://www.wionews.com/videos/china-economic-growth-slowest-in-27-years-236265/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

To revive investment and protect jobs, Beijing has been encouraging banks to lend more, particularly to struggling smaller firms. It has also unveiled billions of dollars in tax cuts and infrastructure spending.

In the first half of this year, local governments' total net bond issuance reached 2.1765 trillion yuan ($316.5 billion), the finance ministry said on Tuesday.

Chinese officials have said repeatedly said debt risks are manageable overall.

A key gauge of China's debt has topped 300 per cent of gross domestic product, according to the Institute of International Finance (IIF), as Beijing steps up support for the cooling economy while trying to contain financial risks.

A key gauge of China's debt has topped 300 per cent of gross domestic product, according to the Institute of International Finance (IIF), as Beijing steps up support for the cooling economy while trying to contain financial risks. China's total corporate, household and government debt rose to 303 per cent of GDP in the first quarter of 2019, from 297 per cent in the same period a year earlier, the IIF said in a report this week which highlighted rising debt levels worldwide. The IIF is a private global financial industry association, based in Washington. "While authorities' efforts to curb shadow bank lending (particularly to smaller companies) have prompted a cutback in non-financial corporate debt, net borrowing in other sectors has brought China's total debt to over $40 trillion - some 15 per cent of all global debt," the report said. "Of note, onshore bond issuance suggests a big pickup in borrowing by local governments and banks this year." China's economic growth slowed to 6.2 per cent in the second quarter, its weakest pace in at least 27 years, as demand at home and abroad faltered in the face of mounting US trade pressure. Watch: China's economic growth slowest in 27 years To revive investment and protect jobs, Beijing has been encouraging banks to lend more, particularly to struggling smaller firms. It has also unveiled billions of dollars in tax cuts and infrastructure spending. In the first half of this year, local governments' total net bond issuance reached 2.1765 trillion yuan ($316.5 billion), the finance ministry said on Tuesday. Chinese officials have said repeatedly said debt risks are manageable overall.

China's debt tops 300% of GDP, now 15% of global total: Institute of International Finance

A key gauge of <a href="https://www.wionews.com/world/opinion-chinas-debt-trap-dilutes-fatf-decision-to-put-pakistan-on-grey-list-149161">China's debt</a> has topped 300 per cent of gross domestic product, according to the Institute of International Finance (IIF), as <a href="https://www.wionews.com/world/us-china-report-progress-in-beijing-trade-talks-206635">Beijing</a> steps up support for the cooling economy while trying to contain financial risks.

China's total corporate, household and government debt rose to 303 per cent of GDP in the first quarter of 2019, from 297 per cent in the same period a year earlier, the IIF said in a report this week which highlighted rising debt levels worldwide.

The IIF is a private global financial industry association, based in Washington.

"While authorities' efforts to curb shadow bank lending (particularly to smaller companies) have prompted a cutback in non-financial corporate debt, net borrowing in other sectors has brought China's total debt to over $40 trillion some 15 per cent of all global debt," the report said.

"Of note, onshore bond issuance suggests a big pickup in borrowing by local governments and banks this year."

China's economic growth slowed to 6.2 per cent in the second quarter, its weakest pace in at least 27 years, as demand at home and abroad faltered in the face of mounting US trade pressure.

To revive investment and protect jobs, Beijing has been encouraging banks to lend more, particularly to struggling smaller firms. It has also unveiled billions of dollars in tax cuts and infrastructure spending.

In the first half of this year, local governments' total net bond issuance reached 2.1765 trillion yuan ($316.5 billion), the finance ministry said on Tuesday.

Chinese officials have said repeatedly said debt risks are manageable overall.&nbsp;

A key gauge of China's debt has topped 300 per cent of gross domestic product, according to the Institute of International Finance (IIF), as Beijing steps up support for the cooling economy while trying to contain financial risks. China's total corporate, household and government debt rose to 303 per cent of GDP in the first quarter of 2019, from 297 per cent in the same period a year earlier, the IIF said in a report this week which highlighted rising debt levels worldwide. The IIF is a private global financial industry association, based in Washington. "While authorities' efforts to curb shadow bank lending (particularly to smaller companies) have prompted a cutback in non-financial corporate debt, net borrowing in other sectors has brought China's total debt to over $40 trillion some 15 per cent of all global debt," the report said. "Of note, onshore bond issuance suggests a big pickup in borrowing by local governments and banks this year." China's economic growth slowed to 6.2 per cent in the second quarter, its weakest pace in at least 27 years, as demand at home and abroad faltered in the face of mounting US trade pressure. To revive investment and protect jobs, Beijing has been encouraging banks to lend more, particularly to struggling smaller firms. It has also unveiled billions of dollars in tax cuts and infrastructure spending. In the first half of this year, local governments' total net bond issuance reached 2.1765 trillion yuan ($316.5 billion), the finance ministry said on Tuesday. Chinese officials have said repeatedly said debt risks are manageable overall.

China's debt tops 300 per cent of Gross Domestic Product, now 15 per cent of global total: Institute of International Finance